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Earlier this week I read a story that caught my attention.  I had to pass it along to you.  It reveals the challenge the counselors and the agencies they work for are facing.

Randall Guerra, the head of the Community Housing Council, quit on January 29. The Community Housing Council is a non-profit counseling agency in Fresno, California.  Randall had been the head of the agency for 18 months.

What’s Interesting Is the Reason He Quit

Plain and simple – he lost faith in the Making Home Affordable Program.  He expected that the program would be able to help many people facing foreclosure save their homes.  However, the program was not doing this.

The challenge he and the counselors who worked for him faced was that their efforts to get mortgage companies to agree to permanent modifications on loans were unsuccessful.   Thus far they have only been successful in helping 2% of the people they represented get permanent loan modifications.

Mr. Guerra said that the Making Home Affordable Program is a good program.  However, the mortgage companies are not following its guidelines.

What were He and His Counselors Experiencing?

All too frequently mortgage companies would tell them that applications and files were lost.  Frequently counselors were hung up on.  Mortgage companies lost faxes.  Many times different people at the mortgage company would tell them different things on the same files.

The challenge that he and his counselors faced was that too many of the people they represented got frustrated with the lack of action on their cases.  They accused the counselors and the agency of not doing anything for them. 

It truly is sad when you can’t help the people who are reaching out to you.  It’s sadder when they lose confidence in what you are doing to help them.

The Sad Thing Is

This same thing has to be happening at other non-profit counseling agencies across the country.  At the end of 2009 only 7% of the people who applied for loan modifications had been approved for permanent modifications.

Facing foreclosure and a financial crisis is an extremely challenging time in anyone’s life.  When a person in this situation reaches out to a counselor at an agency to represent them and little or nothing is done on their case, they legitimately can become very frustrated.  Since they are unaware of the efforts of the counselor and the resistance they are experiencing, they naturally may accuse the counselor of doing a poor job.

Should You Be Demoralized?

If you are facing foreclosure and are working with a counselor at a non-profit agency to get a loan modification, I wanted you to know what is happening.  Your counselor is there to help you.  He or she is probably doing all that they can to get your request approved.

Don’t give up.  Try not to get frustrated.  Talk to your counselor on a regular basis.  Find out what is happening.

If you feel that your counselor is frustrated by the resistance they are getting from your mortgage company, try to build them up.  Let them know that you are grateful for sticking to it and trying to get your modification approved.  Ask them if there is anything you can do to help.

If you are facing foreclosure and are trying to deal with your mortgage company on your own, these are the challenges you are going to run into.  Unless you are determined to follow through, you are very likely to get frustrated with what your mortgage company.  You will want to give up.  Please don’t.  Get a lawyer or an expert in loan modifications to help you.   

You need to know more about the foreclosure process and the steps that you can take to save your home than the people at your mortgage company with whom you deal.  Learn as much as you can about it.  You will probably find the information in my EBook very helpful.  You can get more information on it by clicking Stop Foreclosure.

Much Success,

Mark Elkins

Do you remember hearing that there’s no such thing as a stupid question? That’s not exactly true. The stupid question is the one that doesn’t get asked! This is never been more true than it is with regards to your mortgage

If you are having an issue with your mortgage company whether you are in foreclosure or you’re just behind on your payments, there’s a valuable tool available to you provided for by federal law. This is known as a “qualified request” for information. I said in my book that I think sometimes the bank is just foreclosing out of tradition and not because they actually have the right to do it. This is your opportunity to find out.

The law provides that if you write a “qualified request” to the mortgage company, they must respond in a specified period of time. If they fail to respond in that specified period of time, they are subject to penalties. In your qualified request, you can ask all the things that you ever wanted to know about your mortgage. Things you might want to know are, who owns the mortgage, who owns the note, how much do I owe, what is my interest rate, what is the pay off figure for my loan, are there any fees and charges applied to my loan, and any other thing that you could think that you want to ask about your loan. This is your opportunity to do it.

Once you have this information, you be in a better position to decide what to do with it. Certainly knowing these things will be useful in a negotiation for modification, defending a lawsuit for foreclosure or simply assessing your situation.

You’ll never believe what happened to me when I wrote a “qualified request” recently to a bank, with whom I was negotiating. Two weeks after they got my letter they sent me a letter back that effectively said, “we don’t know who you are or why you think you have a loan with us”! It also said, “all of our loans have been sold and are now owned by someone else”.

The significance of this is that the mortgage company that wrote the letter cannot now foreclose. In the lawsuit a bank files for foreclosure, they state up front who they are and why they’re allowed to sue. They will state that they are a bank and that they lent you money, which you didn’t pay, so now they’re entitled to sue you to get the money. This means that somebody handed the lawyers a case with instructions to sue, the lawyers wrote the standard suit and followed the banks instructions. Unfortunately for the lawyers, the bank says that the borrower in this case doesn’t owe them the money. If the borrower doesn’t owe them money, there can be no foreclosure.

Many of these banks were in such a hurry to get your money by making loans, they didn’t pay attention to the small things. In this case, a small thing would have secured their rights and they didn’t do it!

How did I find out this information that stops the foreclosure in its tracks? I asked for it in a “qualified request” for information. Don’t let the small things slip past you! Read my book. You’ll learn how to find them and make them work to your advantage.

Go get ‘em!

Mark

Facing foreclosure? Is Chase your mortgage company?  Have you applied for a loan modification with them to try to save your home? Then you need to read this.  You also need to read this if you or someone you know was denied a loan modification because the hardship was not considered permanent.

In an article for ProPublica dated February 7, 2010 Paul Kiel reported that Chase has improperly denied some applications for loan modifications.  The reason they gave for the denials is that the applicant’s hardship was not permanent.

In his article Mr. Kiel reports that ProPublica found several cases denied for this reason.  They all occurred in November of 2009.

• One case involved a mortgage broker.  In the paper work he submitted to Chase the broker indicated that he felt that the steps taken by the Obama Administration might turn the Housing Market around.  If that occurred, his income might increase.  Because of that Chase denied his request for a loan modification.
•  Another case involved a lady in California.    Chase denied her request because they said her income had not decreased.  She works as an  x-ray technician.  Because her salary was not high enough, she delivered pizzas three nights a week to supplement her income.  The interest rate on her mortgage was 9.5%.  The monthly payment on her mortgage was over 50% of her income.  When she couldn’t pay the property taxes early in 2009, she fell 2 months behind on her mortgage payments.  She had applied for a loan modification in the spring.  Chase cut her monthly payment from $3,350 to $1,778.  She was able to make these payments and made six before they denied her request for a modification.

The sad thing is that Chase misinterpreted the guidelines for the Making Home Affordable Program.  In December the U S Treasury advised the mortgage companies participating in the program that they could not deny an application because a hardship was not considered permanent.

If Chase denied your application because they felt your hardship was not permanent, take action immediately.  The problem is that the guidelines for the Making Home Affordable Program that once a mortgage company denies a modification, there is no provision for an appeal of that decision.    

If you tried to get the loan modification on your own, speak to a lawyer or an expert in loan modifications.  Explain what happened and get them to represent you.

You may have to file a new application for a loan modification.  If you do, follow up with Chase regularly to make sure that they are processing it.

You can also contact a housing counselor at  1-888-995-HOPE (4673).  Explain that Chase denied your application because they felt your hardship was not permanent.  Add that you understand that this denial was incorrect.  Ask them if there are any steps you can take to get Chase to reopen your case.

You may have read this far and said that your mortgage company is not Chase.  However, they denied your application for the same reason – your hardship is not permanent.  If that has happened, I recommend that you do the same.  Get a lawyer or an expert in loan modifications to help you.  Also call the housing counselor at  1-888-995-HOPE (4673).

The same is true for any family members and friends you have who may have been denied a loan modification for this reason.

In order to save your home from foreclosure, you need to know as much about the process and what steps you can take.  This is not difficult.  You can become an expert in a short period of time.  There is much information available to you.  One source is my EBook.  To get more information on it, please click Stop Foreclosure.

Much Success,

Mark Elkins

I don’t know if you saw or heard about it. 

 On December 30, 2009, the city of Memphis and Shelby County, Tennessee where Memphis is located filed a federal lawsuit against Wells Fargo.  The suit alleges that Wells Fargo had their loan officers steer members of minority groups who were buying homes and looking for mortgages into subprime mortgages.  This was done even though many of these people may have qualified for conventional or FHA mortgages. 

 The suit alleges that Wells Fargo took this action to increase their profits.  They did not think about the ultimate outcome that might occur.  The interest rates on these subprime mortgages were quite a bit higher than the interest rates on either the conventional or FHA mortgages.  Many of the people who got these mortgages could not continue to make the monthly payments and foreclosure action commenced.  As a result of Wells Fargo’s action a disproportionate and unnecessary number of foreclosures were finalized.

The suit contends that Wells Fargo targeted African-American neighborhoods in Memphis and Shelby County. Over 43% of the foreclosures on Wells Fargo’s’ mortgages in Memphis and Shelby County were on homes in these neighborhoods even though  only about 15% of all of their mortgages in the area were on homes in these neighborhoods.  Over 59% of their mortgages in Memphis and Shelby County were on homes in white neighborhoods. Foreclosures occurred on only 21.5% of these mortgages.

 Former employees of Wells Fargo are supposed to confirm that the company gave their loan officers financial incentives to steer people into subprime mortgages where the interest rates were higher even though they qualified for conventional or FHA mortgages.  They frequently told these people to make a minimum down payment.  They also encouraged them to state their income and assets rather than to fully document it in the paper work for their mortgages. 

 The suit contends that as a result of the foreclosures that have been finalized, many homes are now vacant.  Squatters have moved into some.  There has been an increased risk of fire and crime.  This has created additional costs for Memphis and Shelby County. 

 Property values in these neighborhoods have dropped.  This has led to a loss of revenue from real estate taxes for the city and county. 

 Wells Fargo Also Sued By Baltimore and Illinois

 In 2008 Baltimore and the state of Maryland filed a similar suit against Wells Fargo.  In August of 2009 the Attorney General of Illinois filed a suit alleging that Wells Fargo targeted people in African-American and Latino neighborhoods in Chicago for subprime mortgages.  The interest rates on these were higher.  On many of these the foreclosure process has started.

 Just last week, January 7 to be exact, a federal judge dismissed the case in Baltimore.  The judge said that Wells’ harmful practices on mortgages which had been alleged could not be connected with the damages the city has suffered.  It could also not be shown that real estate taxes dropped as a result or that home vacancies rose.  Likewise it could not be established that an increase in criminal activity and the higher police and fire department costs stemmed directly from Wells Fargo’s actions.

 There are strong similarities between the suit filed by Memphis and Shelby County and the suit in Baltimore.  The suit in Illinois is slightly different.  It will be interesting to see whether a judge will reach the same conclusion or a decision will be made in Memphis and Shelby County’s favor.

 If Memphis and Shelby County win their suit and if the Attorney General wins the suit filed in Illinois, the door will open.  Wells Fargo will have no alternative but to agree to modify their loans on virtually all of their subprime loans not only those for African- Americans and Latinos.  This will happen nationwide not only in Illinois and Tennessee.

 If you are facing foreclosure and if your mortgage is with Wells Fargo, I suggest that you talk to a lawyer or an expert in foreclosures.  It would be best for you to be represented by a lawyer or an expert.  They can let you know what your options are.  They can also guide you in the steps to take to save your home.

 I also suggest that you learn as much about the foreclosure process and the options open to you.  There is a lot of information in my EBook.  You can find out more about it by clicking Stop Foreclosure.

 Much Success,

 Mark Elkins

On November 5, 2009 the gloves came off in the state of Ohio.  At stake is how much control can a state have over the way a mortgage company modifies loans for people facing foreclosure in that state. 

 Up until now mortgage companies have run their loan modification programs without any monitoring from state and federal offices.  In some instances the modifications they have offered have been on their terms.  They have given very little consideration to the people to whom these have been offered.  They have also paid little attention to the state or federal governments.

 On one side there is Ohio’s Attorney General.  He filed a suit against American Home Mortgage Servicing, Inc. (AHMSI).  The suit alleges that the company violated Ohio’s consumer protection laws.  His suit deals with how AHMSI is handling the cases of people whose loans they are servicing and who have requested loan modifications.  He asserts that the company violated the law by

•  Ignoring the requests of people facing foreclosure for loan modifications,
•  Having incompetent and inadequate customer service, 
• Failing to modify loans in a timely manner, and  
• Offering unfair and deceptive terms on loans that it did modify.

 The Attorney General’s office indicated that they had received complaints from 119 residents of Ohio facing foreclosure about the way AHMSI treated them when they asked for help to save their homes.

 In this suit the Attorney General seeks a permanent injunction against AHMSI continuing these practices.  He also asks penalties to be assessed.  He also requests that the court order the company to put in place processes designed to provide efficient, competent and adequate customer service for all of the Ohio residents whose loans its services.

 On the other side is American Home Mortgage Servicing Inc.  This is not a mortgage company.  It is a servicer.  It originally was the servicing arm of American Home Mortgage.  When that company went bankrupt in 2007, American Home Mortgage Servicing Inc. was sold to Wilber Ross & Co LLC.  The company services the loans kept by American Home Mortgage.  They also have become the second largest servicer of subprime loans in the United States.  They took over the servicing of the loans of Option One when that company went bankrupt.  They purchased the servicing rights on some subprime loans from Citi Residential.  In 2009 they started servicing some loans of the bankrupt Taylor, Bean and Whitaker that they purchased from Wells Fargo.

 At the same time the lawsuit was filed by the Attorney General in Ohio, AHMSI filed a counter suit against the Attorney General.  They asked the court to declare that the way they handle loan modifications and the service they offer to people seeking loan modifications are in line with the law in Ohio.  When they filed their suit, the company sent out a press release.  Here are some of their comments from that release:

•  They have a large staff in place and have high customer service standards.
•  Their customer service representatives work closely with people who contact them to resolve questions, concerns and complaints they have. 
• They have worked closely with people from Ohio who have contacted them about loan modifications. 
• Since joining the Making Home Affordable Loan Modification Program in July of 2009, they have sent letters to every Ohio resident behind on their loan payments and eligible for a potential modification under this program inviting them to apply for a modification. 
• Prior to joining the Making Home Affordable Modification Program they had developed their own loan modification program to assist those who were facing foreclosure. 
• Representatives of their company have participated in Outreach events held in Ohio at which they have met face to face with people whose loans they serviced and were facing foreclosure. 
• Since October of 2008 the company modified the loans of 2,200 people in Ohio under their own program.  There were an additional 173 people who currently have trial loan modifications under the Making Home Affordable Modification Program.

 In the press release they also commented on their nationwide effort to help people facing foreclosure save their homes.  They said that from October 1, 2008 to September 30, 2009 they have offered more than 67,000 loan modifications to people whose loans they service.  These were outside of the Making Home Affordable Modification Program.  This was greater than 15% of all of the loans they service.  On 79% of these, the monthly principal and interest payments were reduced by an average of 30.5%.  Since they joined the Making Home Affordable Modification Program on July 22, 2009 they have initiated more than 6,800 loan modifications under that program.

 Who is correct?  Is the Attorney General correct or has AHMSI acted in the best interests of the people in Ohio whose loans they service?  The courts will decide this.  However, there is other information available which shows how AHMSI is working with people who are facing foreclosure and want to save their homes.

The Obama Administration publishes a monthly Servicer report showing how each company is performing in the Making Home Affordable Modification Program.  The report through November of 2009 indicates that AHMSI’s loan modification activity has been very poor.  Trial loan modifications have commenced on only 6.3% of all of the loans AHMSI services which the Administration estimates are eligible for modification.  Thus far permanent modifications have only been offered on 201 loans.  That is 2.6% of their loans with trial modifications. 

 The report indicates that trial loan modifications have been offered on 23% of all of the loans for all mortgage companies in the program.  Permanent modifications have been offered on 31,382 loans.  That is 4.1% of all loans with trial modifications.  So AHMSI is right near the bottom.

 Here are the figures for AHMSI from the report through November of 2009:

•  120,787 – Estimated loans eligible for modifications 
•  12,621 – Trial Loan Modifications Offered 
•    7,642 – Active Trial Loan Modifications 
•       201 – Permanent Modifications

 As these numbers indicate, AHMSI has just barely scratched the surface on the loans they are servicing where people are facing foreclosure.  They report that they have modified more than 67,000 loans outside this program.  There is no way to know how accurate this figure is since an independent company has not verified it.  There also is no way to know how many loans that the company services which are outside the Making Home Affordable Modification Program are eligible for loan modifications.

 A search on Google indicates that there have been numerous complaints from people nationwide whose loans AHMIS services.  Many deal with the poor service they have received from the company when they asked for a loan modification.  In August of 2009 there was one post which suggested that the people who had problems with AHMSI ban together and file a class action law suit against the company.

 Much is at stake in these suits for the Ohio Attorney General, AHMSI and the people whose loans they service who are facing foreclosure.

The Attorney General has to protect the people of Ohio.  He has to make sure that those who are facing foreclosure and who desire to save their homes are not mistreated by the mortgage companies handling their loans.  If his suit is successful, then he will be able to go after other mortgage companies against whom complaints have been filed and get them to correct their ways.

 IF AHMSI is successful, they will avoid penalties.  They also will be able to process requests for loan modifications without governmental agencies looking over their shoulders and demanding that they handle these any differently than they are currently.  If they lose the suit not only will they have to pay a penalty assessed by the state of Ohio for their actions, the company will also open itself up to law suits filed in other states.  There is also the potential of a class action suit being filed against them.

 If the Attorney General wins the suit, people facing foreclosure whose loans are serviced by AHMSI will get better service from the company when they request a loan modification.  Their requests will be processed more timely.  Any modifications will be fairer for them.  If AHMSI wins the suit, then they will continue to be treated as they have been with little change being made by AHMSI.

 It is unclear who is right.  Are they allegations made against AHMSI by the Attorney General in Ohio correct?  Are the assertions made by AHMSI about the job they are doing on loan modifications correct?  If you are facing foreclosure and if your loan is being serviced by AHMSI, you should hire a lawyer skilled in foreclosure law to represent you.  You have too much to lose if you don’t.

 I would also recommend that regardless of who your mortgage company is, don’t try to get a loan modification on your own.  Hire a lawyer or an expert in loan modifications to represent you.  They can get a far better outcome for you. 

 You may also want to check out my EBook.  It will help you understand the foreclosure process and the steps you can take to save your home.   You can get more information on it by clicking Stop Foreclosure.

 Much Success,

Mark Elkins